Subscribe

Archive for the ‘Short Sales’ Category

This is an excellent article from yesterdays Sun Sentinel. Please feel free to pass it along and share with anyone that might benefit from this.

For William and Lida Negron, their lender’s decision to modify their mortgage seemed to be the key to holding on to their home. William Negron, in his mid-70s, lost his job in car sales two years ago. The possibility of losing their home put “so much stress on him,” said son Carlos Negron. “My mother has been to the hospital twice because of this.” Click here for the full article.

I saw this condo yesterday at a brokers open with friends, and WOW. The “Four Seasons” is my favorite building in the entire city of Fort Lauderdale. Located on Sunset Drive just off Las Olas and just west of the Intracoastal Waterway. This is a fully restored Mid-Century building with 24/7 doorman service, covered parking and available dockage with ocean access/no fixed bridges. Any size pets welcome. This was just relisted as an approved short sale for $385,000-this is the previous listing, disregard the list price. 3 bedroom, 3 bath home sized condo at 2400+ square foot. Enjoy views of Sunset Lake, Ocean and Intracoastal. Near 9′ ceilings add drama to already huge spaces, eat-in sized kitchen plus den/family room and Florida room. A/C, cable and hot water are included in your monthly maintenance.

I just received the sales statistics for Broward County for the month of November and there isFANTASTIC news in the numbers(AGAIN)! These number have been improving for over a year now. There are fantastic buys to be had in every price range and my clients are getting incredible deals, unlike I’ve seen in years. Market activity has picked up tremendously and I’m the busiest I’ve been in 4 years. Call or email me for exemplary service in South Florida.

New Listings

Single Family-1,568, 13% lower than 08′
Condo/Townhome-2,026, 6% lower than 08′
Total all property types-5,878, 9% lower than 08′

Given our current inventory and sales levels, if there were to be nothing else listed, we have a 8 month supply of single family homes on the market(down 60% from the previous year) and a 10 month supply of condos on the market(down 64% from the previous year).

Wow, November already? Hope everyone had a great Halloween. Lots of good things to share with you this month. Activity in our market continues to pick up and gain momentum. The statistics just came out for October in Broward County and there is fantastic news in the numbers again. Sales for single family homes are up 36% and available inventory is down 46%. Condo/Townhomes showed an increase in sales of 66% over 2008 and available inventory is down 35%. For more details check out the post below this one for all the numbers.

Homebuyer tax credit extension. The senate has approved a 7 month extension of this tax credit with some added benefits for buyers who are not first time home buyers. This will go a long way in helping to continue the upward trend in the real estate market. It still has to pass the house and get to the president for his signature, but all signs are pointing to a positive outcome. Click here to read the full article.

Short sales continue to be a big part of our market and there has been one big change in how 1st lien holders are handling them. In the past the first mortgage was looking to recover 75-80% of what is owed-which didn’t always work depending on the amount owed and the current market value. Now, they are accepting current market value or close to what the last comparable property closed for. If you want more information, click on the tab above “Short Sales”. And if you’re looking for an experienced title company that is excellent in closing them, the only game in town is Roberto & Associates, 954.776.7498, Joe Roberto.

I have 2 great opportunites listed-$69,000 one bedroom condo in Wilton Manors, down the street from the “Drive”. And a one bedroom condo in Coral Ridge for $67,000 can be rented immmediately. Lastly, looking for an inexpensive rental? $975, two bedroom two bath also down the street from the “Drive”

“Jon is the most intuitive real estate agent I know – as well as the most patient. After describing the kind of house I wanted to purchase he took me right to my ideal home. Of course I wanted to see more and Jon worked with me and took me to see other properties. It did not take long for me to know that the first house Jon showed me was the one and I bought it. He was extremely helpful post-sale in recommending the absolute best service personnel – carpenters, etc. I highly recommend Jon as a realtor.” Steve Cantrell

“As a first time home buyer I chose you as my REALTOR because my parents had used you when purchasing several properties. We spent long hours and several months looking at homes. It seemed like I was never going to find anything, but you kept me on track and finally found the perfect home for me. You were so knowledgeable, helpful, and patient. You were there for every little problem I encountered and referred me to a wonderful mortgage broker (Jim Monninger) who guided me through the involved loan process. Thank you so much for your help and I will be recommending you to anyone I know who needs a REALTOR.”Andrew Toy

I wanted to share this information with you-it comes from Joe Roberto at Roberto & Associates Title Company. If you are considering buying or selling a short sale, this reputable company is the ONLY GAME IN TOWN. Don’t chance it, have them handle the closing.

Joe Roberto ,President & Licensed Title Agent, 954.776.2424

SHORT SALES

Want to save yourself aggravation and know the “real deal” with short sales – you may want to read the following tips. As we all know, the handling of the short sale process depends on the seller’s financial scenario, who owns the loan, the lenders/investors ever changing policies, etc. Thus, we at Roberto & Associates Title Agency, Inc. try to share issues and information to help all of us continue to have success with closing short sales.

MYTH – Sellers, and some agents, believe that when a lender approves a short sale, that there will not be a deficiency or 1099 issued by the lender.

REALITY – This is NOT necessarily the case. A lender’s agreement to a short sale allows the property to be conveyed and sold. They will “release” the mortgage so that the new buyer can obtain the property through a purchase but the lender may not agree to the short sale as a full “satisfaction”. As a matter of fact, all short sale sellers should assume that a lender may reserve the option, after the closing, to pursue the deficiency OR issue a 1099 to IRS for the debt forgiven. Please note that a lender can only pursue the deficiency OR issue a 1099 – but they do not do both. And even if a 1099 is issued, it does not necessarily mean that there are tax implications. The seller should contact a professional tax advisor. Most importantly, only after the lender issues a written short sale approval letter, will the lenders conditions be stated – i.e., whether they may pursue the deficiency or not. Even when a seller pleads with the lender to accept the payment as full, often times the lenders (and their investors) will “still reserve the right” and will not budge to add the language of them not pursuing. So, if a seller is absolutely not going to agree to this possibility, you, as an agent may want to consider whether the short sale property can even be sold from the beginning. If not, there are many people who could be wasting their time – listing agent, buyer, title company, mortgage broker, etc. – especially after time has elapsed waiting for the short sale to get approved.

MYTH – All short sale commissions are now guaranteed to be at 6%.

REALITY – NO, only Fannie Mae backed loans are providing for a 6% commission as policy. If the loan is backed by Freddie Mac, other investors, etc. the commission may be asked to be reduced.

MYTH – Raising the commission to greater than 6%, because a lender will sometimes reduce the commission, will help agents get to keep the target 6%.

REALITY – While we understand that much more work goes into short sales, etc., and you should certainly do what you, your broker, seller, etc. agree to, it is our belief that doing so only draws attention to the commission. And if the short sale policy is to reduce it, no matter how much higher it is submitted, they will reduce it to the level “their investor/lender policy” states.

MYTH – Sellers have to be late with their payments to be considered for a short sale.

REALITY – This is not necessarily the case for many lenders now. If the seller can demonstrate a true financial hardship, the property is listed, the contract offer is close to the last sold price, etc. many lenders will consider a short sale. It is important to understand that the highest priority of approving short sales are those properties close to a “final sale date”, followed by properties whereby the foreclosure process has started with the filing of a Lis Pendens, and so on.

MYTH – A seller can try to do a loan modification while they also try to list and sell their property as a short sale.

REALITY – Many lenders will not consider a short sale if the owner of a property has a pending loan modification request in progress. The property owner needs to decide BEFORE they start a short sale whether they want to do a loan modification OR a short sale and ensure the lender knows of their change. If not, the lender will STOP the processing of any short sale request until the loan modification is halted by the homeowner. While we all are in the business of handling closings, if the seller would like to keep their home and can afford to do so, great – but let’s not waste our time if a loan modification is a possibility and the seller would prefer to keep their home.

MYTH – A contract for the full list price will make the short sale approval go faster.

REALITY – The answer is maybe and maybe not. The real question is, is the contract relatively close to the last comparable sold price. List prices mean nothing to lenders – especially in this market. Some list prices are set at what the owner owes is reduced gradually (which makes no sense to us) and some list prices are so very low just to get an offer in on a distressed property. If there were no recent comparables, then it becomes a little more difficult – so the appraised value or BPO (Broker’s Price Opinion) will decide. Want to jump start the process; have an appraisal done if a CMA is impossible. With a short sale, it may be a waste of money for the buyer but for the seller it is the quickest way to get to the closest “sales price.” Just an idea.

MYTH – A lender will always work with buyers and sellers, after they approve a short sale, on an extended closing date.

REALITY – Lenders often agree to a short sale verbally and then take several days (and sometimes longer) to send the final approval letter. The approval letter will often state a closing date. If the buyer, due to financing delays can not close, often times a lender is willing to provide “some” additional time. But lenders are not willing to extend a closing date to accommodate a seller still trying to move out, find a place to rent, etc. It is important to ensure that renters will be out and sellers will be ready when the green light is given on a short sale.

Did you know?

1.Some lenders will not consider a short sale if the property owner has not filed income tax returns for 2006 or 2007.

2.Most first mortgage lenders, including Bank of America, will only allow (an unwritten short sale guideline they all follow) the second lender to get a maximum of approximately $3,000. BUT, when Bank of America is in a second lender position they now (their policy has just changed) want 5% of the net (net of what is going to any and all lenders) for a short sale to be approved by them. Stay tuned.

3.If the bank wants copies of pay check stubs and the seller is unemployed, may we suggest they write a separate letter that they are not submitting pay stubs because they are unemployed – even if stated in the hardship letter.

4.Some lenders are now refusing to pay large or, with one lender, any delinquent association dues on short sales.

5.Asking short sale lenders for repairs after they have approved the short sale can be challenging to say the least. This is especially important to remember when the buyer is doing an FHA loan. Thus, FHA buyers may not want to consider short sale properties that will need roof repairs, etc.

6.A short sale must be an “arms length transaction.” The definition of an arms length transaction is that all parties (buyers, sellers, and real estate agents) are not related nor have a business relationship to each other. Many lenders are now requiring an affidavit to be signed attesting to this at or before the closing. And even if an affidavit is not required by the lender(s), it is understood that all parties are arm’s length in short sale transactions. If not, the lender needs to be informed before making their decision.

7.Many short sale lenders are no longer accepting Power of Attorneys to be used to sign HUDs. The seller must sign the HUD themselves. This is especially important to remember for sellers who will not be at closing.

8.Roberto & Associates Title Agency, Inc. knows the ins and outs of short sales – can you tell. Volume, experience, training, and a true thirst to understand short sales pay off for our clients.